FOR RECORD ONLY $//Appeal ORDER, Adelphia, Charlottesville, VA, DA 95-157//$ $/76.986 A La Carte Offerings/$ $76.944 Commission Review of Franchising Authority Decisions/$ Before the FEDERAL COMMUNICATIONS COMMISSION Washington, D.C. 20554 DA 95-157 In the Matter of: ) ) MULTI-CHANNEL T.V. CABLE COMPANY ) d/b/a ADELPHIA CABLE COMMUNICATIONS ) ) Interlocutory Appeal of ) Local Rate Order of City ) of Charlottesville, Virginia ) ORDER Adopted: February 6, 1995 Released: February 7, 1995 By the Chief, Cable Services Bureau: I. INTRODUCTION 1. On November 3, 1994, Multi-Channel T.V. Cable Company, d/b/a Adelphia Cable Communications ("Adelphia"), filed with the Commission a Petition for Interlocutory Review of Initial Decision ("Petition") of the preliminary rate order adopted by the City of Charlottesville, Virginia (the "City"). In a Resolution, adopted October 19, 1994 (the "local order"), the City made an initial determination that Adelphia's collective offerings of certain a la carte channels be treated as a regulated tier of service. 2. In the Implementation of Sections of the Cable Television Consumer Protection and Competition Act of 1992: Second Order on Reconsideration, Fourth Report and Order, MM Docket No. 92-266, 9 FCC Rcd 4119 (1994) ("Second Reconsideration Order"), the Commission provided that as part of their review of basic service tier rates, local authorities may make an initial decision addressing only the regulatory status of any a la carte package at issue. The Commission further provided that the local authority's initial decision may be appealed to the Commission within 14 days and that the issuance of an initial decision on a la carte issues will toll the time period within which local authorities must decide local rate cases. II. DISCUSSION 3. Adelphia objects to the City's finding in the local order that the CableSelect channels must be included as regulated channels for purposes of the local order. Adelphia argues that the City exceeded its authority in determining that its a la carte services should be treated as regulated channels. Adelphia argues that the City applied the wrong legal standard when it relied on the 15 interpretive guidelines announced by the Commission in March 1994 to determine the regulatory status of Adelphia's a la carte channels and unfairly gave "retroactive effect" to these guidelines. Adelphia further argues that its a la carte packages comply with the provisions of the 1992 Cable Act, which it contends encourages cable operators to unbundle programming services from regulated tiers and offer them on a per- channel basis and that the packages comply with the Commission's a la carte rules in effect at the time the packages were created. The City responds that it properly exercised its authority and correctly applied the Commission's guidelines on a la carte packages in concluding that the channels in Adelphia's package should be treated as regulated channels. 4. The Adelphia a la carte services at issue were first offered to subscribers on August 30, 1993, when Adelphia restructured the service offerings on its Charlottesville system. Adelphia states that beginning August 30, 1993 it began offering all "non-basic" services on an a la carte basis. Adelphia states that its August 30, 1993 restructuring involved eliminating its 17 channel "satellite service" cable programming service tier and its 14 channel "expanded satellite" cable programming service tier and offering all 31 channels both on an individual basis and as a package of 17 channels called CableValue or as a package of 31 channels called CableSelect that Adelphia alleges are not subject to rate regulation. 5. The regulatory status of such an offering has previously been addressed by the Commission. In Adelphia Cable Partners, L.P. South Dade County, Florida, LOI-93-42, DA 94-1277 (Cab. Serv. Bur., released Nov. 18, 1994), we resolved the regulatory status of a similar a la carte offering by Adelphia on its South Dade County, Florida system. In Adelphia Cable Partners we found that Adelphia's retiering on its South Dade County system constituted an evasion of rate regulation. We therefore found that Adelphia's South Dade a la carte package must be treated as a rate-regulated cable programming service tier and that the channels composing it must be counted as rate-regulated channels for purposes of rate justification as of September 1, 1993. 6. Adelphia's Charlottesville a la carte package closely resembles its South Dade a la carte package which was the subject of our order in Adelphia Cable Partners. Accordingly, the regulatory status of Adelphia's Charlottesville package at issue in this petition should be the same. We find that the City's conclusion that the channels in Adelphia's a la carte package must be included as regulated channels is consistent with letter of inquiry orders issued by the Bureau, and in particular in Adelphia Cable Partners. Therefore, we hereby deny Adelphia's Petition. III. ORDERING CLAUSES 7. Accordingly, IT IS ORDERED that the petition for review of the local order, with respect to the issue of the regulatory status of Adelphia's a la carte package, is DENIED. 8. This action is taken by the Chief, Cable Services Bureau, pursuant to authority delegated by section 0.321 of the Commission's rules. 47 C.F.R.  0.321. FEDERAL COMMUNICATIONS COMMISSION Meredith J. Jones Chief, Cable Services Bureau